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Singapore in Numbers - Social Assistance

July 16, 2018

Singapore meteoric rise in economic development has been well documented; having evolved from the small fishing village to an economic powerhouse within one generation (50 years or so).  However, with economic development at breakneck speeds also comes new challenges for Singapore; one such challenge being the growing social inequality between the rich and the poor has policies makers taking notice of late. 

To be clear, steps have been taken and programmes are in place to address this issue; but the public discourse seems to suggest that more needs to be done.  However, before an objective and informed discussion on the improvements to the current programmes can be had, we must first objectively consider who the current programmes are targeting and reaching; and how such programmes are helping them.  Below is a sampling of some of the more popular social assistance schemes and programmes (not an exhaustive list).

 

You will note, there are several qualifying criteria established for each programme to ensure that the assistance reaches the right people and forms the basis for distributing the finite assistance resources available.  Many of them revolve around the following measures:

  • Type of Dwelling

  • Monthly household Income

  • Monthly household Income per member

Let us consider Singapore society through the lenses based on the above metrics.

 

Type of Dwelling

U-save and S&CC rebates are reserved only for those who are living in HDB public housing; whereby those who are living in smaller units getting a higher quantum of the rebate.  The underlying assumption being that those who are living in smaller public housing units (1-2 rooms) are likely to be in the lower income groups.  Let’s examine how Singapore society is stratified along the lines of dwelling types. 

Did you know:

  • 3.93M residents live in 1.2M dwellings; where 80.3% residents live in public housing which make up 85% of all dwellings in Singapore in 2016

  • Public housing houses more people on average as compared to private property

    • An average of 3.11 persons per HDB dwelling; versus an average 1.42 persons per private property dwelling

  • 4 room HDB flats are the most popular HDB dwellings; making up 40% of all HDB dwelling

    • 1-2 room HDB flats only make up only 7.4% of all HDB dwellings

  • Dwelling type may not an accurate indicator of household incomes

    • 6.5% of the lowest 10% of household incomes live in private property

    • Most of those in the lowest household income decile live in 3-4 room flats (60%); only 18% live in 1-2 room flats

    • 39% of the highest 10% of household incomes live in HDB dwellings

    • 18% of those with no household income live private property

Data suggest that sizable number of household in the upper quartiles of household income qualify for utility and S&CC rebates; not just low-income households.  Under the current eligibility criteria, an estimated 51,000 households within the highest 10% of household incomes could qualify for Utility, Service and Conservancy rebates; provided they do not own another property. 

 

Monthly Household Income 

Household income is another popular qualifying criterion for social assistance; as a measure of the financial resources available to the household.  However, not all households are alike…

 

Did you know:

  • Most households have an average of 3+ (3.2-3.85) members in the household; except for the top 10% of household income who have only 2.53

  • Most households have close to 2 working persons (1.7-2.2) in the household; except for the lowest 10% of household income (1.29)

  • Income earners in households in the lower deciles have a heavier burden in terms of number of people that their incomes support

    • The lowest 10% of household incomes support an average of 2.71 people; versus the top 10% of household incomes who only support 1.47 people

  • The top 10% of household incomes earns 15.8 times more than the lowest 10% of household incomes

    • However, each member of the top 10% of household income has 21.9 times for financial resources to distribute per member compared to the lowest 10%

  • As household income deciles increase, the likelihood of a household having at least 1 car also increases; up to 61% in the top decile.

    • Interestingly, 14% of the lowest 10% of household income ALSO own at least 1 car

  • Maids appear to be a common feature in Singapore households, regardless of household income

    • 17-19% of the 51st to the 100th percentile of household income has at least 1 maid,

    • 11% of the lowest 10% of household income also have at least 1 maid

Against this backdrop, you’d have to have a monthly household income of less than $1,500 to qualify for public rental housing and that would put the applicant in the lowest decile of household income. And to qualify for Edusave Merit Bursaries, you’d have the have a monthly household income of less than $6,900; which suggests that about 40% households qualify. 

Data suggests there is significant variation within households; from the number of wage earners, to the number of member within the household, to their life style choices (cars and domestic help).  Clearly there are many more other variations in households beyond what is presented in the data; and that household income alone may not fully account for.

 

Household income per member

Household income is not an end unto itself, it is typically used to support the needs of ALL members in the household; not just the wage earners.  For the same household income, larger households would have fewer resources available to distribute to each member as compared to smaller ones.  For the young, it could mean more enrichment classes or better schools; for the old, it could mean better healthcare; for the income earners, it could mean more luxuries or holidays. 

For this reason, household income per member could provide a better indication of the household economic situation.  That said, it does not guarantee the same social outcomes; it cannot account for poor life choices, chronic medical conditions of members in the household and other factors.  Regardless, it still gives an objective reference point in terms of financial resources available to each member before other factors come into play.

Key Highlights:

  • Household income per member has been growing across all deciles over the last decade

  • The relative gap between the top decile and bottom decile of household income per member (expressed as a ratio) appears to be falling, not including government transfers

    • The top decile earns 23.9 times more than the lowest decile of household income per member; the same figure was 25.6 ten years ago

    • The top 10% of household income per member grew by 54% over the last 10 years; while the bottom 10% grew at 65% over the same period

Roughly 40% of households have a household income per member of $1,800 or less, which qualifies them for Edusave Merit Bursaries and CHAS orange healthcare subsidies.  While 20% of households have a monthly household income per member of $1,100 or less, which qualifies them for the highest level of healthcare subsidies – CHAS Blue. 

 

Key observations and considerations

 

The analysis clearly shows that individuals, families and households cannot be fully defined by one or even a handful of metrics; thus, any policy, scheme or programme designed around it as the basis to distribute social assistance is unlikely to be 100% accurate.  But not having any criteria at all is not optimal either.  On one extreme, everyone gets access and less assistance on average; on the other, no one gets access to social assistance at all.  So, it does come down to making some trade-offs knowing that some fine tuning is necessary.

Of the three measures explored in this article,

  • Distributing social assistance through dwelling type alone may not be effective nor efficient

    • Significant variation in household incomes across dwelling types

      • 6.5% of the lowest 10% of household incomes live in private property

      • 39% of the highest 10% of household incomes live in HDB dwellings

    • For this reason, many in the higher household income groups could inadvertently qualify U-Save and S&CC rebates (provided they do not own a second property); while many low-income households may not be getting any or as much.

  • Household income appears to give a better measure of the financial resources available; but it fails to account for the number of members that the income is intended to support

    • While data suggest that those in lower income households tend to have more members to support on average; it may not apply to all households

    • For the same household income, it could be quite comfortable for a family of 2; however, a family of 5-7 might struggle.

  • Household income per member probably provides the most indicative measure of a household’s financial situation

    • That said, the same financial resources available to each member does not guarantee the same social outcomes.  However, it does provide an objective reference point with which to distribute finite social assistance.

Based on the criteria set out for the social assistance programmes and schemes explored in this article, it might be worthwhile to ponder the following:

  • Can/should the distribution of utility and S&CC rebates be more refined? 

    • Especially since many in the upper quartiles of household income also receive them

    • Can the rebates then be more meaningful for the households that need the relief?

  • Few will argue with programmes like the public rental housing schemes and the CHAS blue subsidies helping the bottom 10-20% of household incomes and household income per member

    • But data suggests that social assistance is provided up to the 40th percentile of household income per member (Edusave merit bursaries and CHAS Orange)

    • What does it imply when social assistance is provided for citizens up to the 40th percentile in household income per member? 

       

       

       

       

       

       

       

       

       

 

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